Tousley v. Atlantic City Ambassador Hotel Corp.

50 A.2d 472, 25 N.J. Misc. 88, 1947 N.J. Sup. Ct. LEXIS 28
CourtSupreme Court of New Jersey
DecidedJanuary 3, 1947
StatusPublished
Cited by7 cases

This text of 50 A.2d 472 (Tousley v. Atlantic City Ambassador Hotel Corp.) is published on Counsel Stack Legal Research, covering Supreme Court of New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tousley v. Atlantic City Ambassador Hotel Corp., 50 A.2d 472, 25 N.J. Misc. 88, 1947 N.J. Sup. Ct. LEXIS 28 (N.J. 1947).

Opinion

Burling, S. 0. C.

This is a motion to strike the complaint. Bor the purpose of this motion, the defendant admits [89]*89the truth of all facts well pleaded in the complaint and all inferences of fact which can be legitimately drawn therefrom.

This action is upon an integrated contract. The contract is between the defendant, the owner and operator of a hotel in Atlantic City known as the Ambassador Hotel, and the plaintiff to engage his services as managing director thereof. Paragraphs 3 and 4 of the complaint allege:

“3. On or about the thirty-first day of December, 1945, plaintiff and defendant entered into an agreement wherein and whereby defendant engaged and employed the plaintiff to act as Managing Director of the Ambassador Hotel in Atlantic City, New Jersey, and take active charge of the management and operation of said hotel and to devote all of his time and efficient and conscientious efforts to the management and operation of said hotel and the promotion of its business, which agreement was to extend for a period of three years from November 1st, 1945, to October 31st, 1948, and for which services as Managing Director the plaintiff was to receive, and defendant agreed to pay the plaintiff, the sum of $15,000, per annum in equal monthly installments of $1,250 at the end of each calendar month. That together and in addition to, the fixed salary hereinabove mentioned, plaintiff was to receive, and defendant agreed to pay to plaintiff, 3% of the net earnings of the Ambassador Hotel for the twelve months period ending on December 31st of each year during the term of said contract. A copy of said agreement is attached hereto, made a part hereof as though fully herein set forth and marked Exhibit eA.’

“4. That in accordance with the terms and the provisions of said contract, plaintiff entered upon the performance of his duties as Managing Director of the Ambassador Hotel and performed all and singular the terms and conditions required of him as Managing Director of the Ambassador Hotel and performed all and singular the terms and conditions required of him under said agreement and continued in the performance of said duties until on or about the twenty-sixth day of April, 1946, at which time defendant without any just cause or reason, and in violation of the terms and conditions of the agreement hereinabove mentioned, discharged the plain[90]*90tiff from his said position as Managing Director of the Ambassador Hotel and refused to pay him the sums of money becoming due and owing to him under the terms and conditions of said contract hereinabove mentioned thereby breaching said agreement.”

In disposing of this motion, the objection to paragraph 7 of the complaint will be first dealt with. Paragraph 7 reads as follows:

“7. As a further result of the action of the defendant in dismissing the plaintiff from its employ before the expiration of said agreement, plaintiff has suffered and sustained injury and damage to his reputation as a Managing Director among the owners of hotels throughout the country as a result of which he has been unable to obtain employment as such Managing Director by reason of his dismissal by the defendant and the unlawful termination of his employment under the terms of said agreement, which damage directly and naturally resulted in the ordinary course of events from the action of the defendant in dismissing the plaintiff from' its employ before the expiration of said agreement for which plaintiff will claim special damages.”

By the brief of the defendant it is asserted reasons 3, 4, 6, 6 are directed thereto. They read as follows:

“3. Paragraph 7 purports to plead a claim for damages which is not' actionable and which is frivolous.

“4. The complaint does not allege sufficient 'facts upon which to predicate a cause of action for the damages which the plaintiff claims he is entitled to.

“5. The plaintiff seeks damages which are not justified and to which the plaintiff is not entitled under and pursuant to the allegations of the complaint.

“6. The plaintiff seeks damages which are not justified and to which the plaintiff is not entitled under and pursuant to the allegations of the complaint since the contract annexed to the complaint in paragraph YII limits the recovery for the termination of plaintiff's employment to a specified sum or sums.”

The rule for damages upon breach of a contract has been stated in Marcus & Co., Inc., v. K. L. G. Baking Co., Inc. [91]*91(Court of Errors and Appeals, 1939), 122 N. J. L. 202 (at p. 208) ; 3 Atl. Rep. (2d) 627 (at p. 631), as follows:

“The general rule for the admeasurement of damages consequent upon a breach of contract is the loss directly and naturally ensuing from the breach in the ordinary course of events. The party guilty of the breach is liable only for the losses reasonably foreseeable, at the time of the making of the contract, as the probable result of the breach. To borrow the language of Alderson, B., in the leading English case of Hadley v. Baxendale, 9 Exch. 341, the damages recoverable for a breach of contract are limited to such as may ‘reasonably be supposed to have been in tbe contemplation of both parties at the time they made the contract as the probable result of the breach of it.’ ”

And at p. 211 of 122 N. J. L.; at p. 632 of 3 Atl. Rep. (2d) :

“Whether it be regarded as founded in tbe common consent of tlie parties, or as pMasi-contractual in nature, it is an obligation imposed by law on the guilty party to answer in damages for the reasonably foreseeable consequences of his breach. He is not justly chargeable with a greater liability than was contemplated by the parties; for, in a case such as this, it is his undoubted right, by express provision, to alter the standard for the admeasurement of damages in the event of a broach, i. eto stipulate for an enlargement or curtailment of the liability thus imposed, or even for liquidated damages, regardless of the loss actually suffered.”

The contract was for three years from November 1st, 1945. It provided a plan upon notice, for prior termination beginning November 1st, 1946. No provision was made for termination prior thereto. As alleged in the complaint, the defendant discharged the plaintiff without just cause or reason on April 26th, 1.916, and refused to pay him further.

There seems to be no express decisions in New Jersey upon the subject of damages to reputation resulting from breach of contract. However in a tort case of Spiegel v. Evergreen Cemetery Co. (Supreme Court, 1936), 117 N. J. L. 90 (at p. 95); 186 Atl. Rep. 585 (at p. 588), Mr. Justice Heher, speaking for the Supreme Court, said:

[92]*92“It is to be remarked, in passing, that the common law did not permit damages for mental distress consequent upon a mere breach of contract. This doctrine, too, is subject to exceptions; and it may well be that, on principle, it is inapplicable where the subject-matter of the contract is such as to make it certain or reasonably probable that the parties had in contemplation, at the time of the making of the contract, a pecuniary satisfaction for the anguish and distress of mind ensuing from a breach of its terms.

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50 A.2d 472, 25 N.J. Misc. 88, 1947 N.J. Sup. Ct. LEXIS 28, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tousley-v-atlantic-city-ambassador-hotel-corp-nj-1947.